1996 (1) TMI 261 - AT - Central Excise

Issues Involved:
1. Admissibility of exemption under Notification No. 259/83-C.E.
2. Compliance with procedural requirements for claiming exemption.
3. Whether the appellants switched from condition (a) to condition (b) of the Notification.

Issue-wise Detailed Analysis:

1. Admissibility of exemption under Notification No. 259/83-C.E.:
The appellants sought exemption under Notification No. 259/83-C.E., which provided a partial exemption to V.P. made from indigenous rice bran oil, subject to conditions. They filed declarations for the financial years 1983-84 and 1984-85, albeit with some procedural delays. The Notification required manufacturers to notify their intention to the Assistant Collector at the beginning of each financial year and to maintain the chosen method of manufacture throughout the year. For 1983-84, the appellants gave notice through a classification list dated 24-1-1984 and sought an extension of time via a letter dated 10-2-1984. The Tribunal noted that the form of notice was not prescribed and that the classification list effectively served as notice. The Tribunal held that the appellants had substantially complied with the Notification's conditions, and any procedural irregularities should not deny them the exemption.

2. Compliance with procedural requirements for claiming exemption:
The Revenue argued that the appellants should have obtained an extension of time from the Collector to claim the exemption. The Tribunal observed that the appellants had indeed sought an extension and that the Collector's failure to respond should not disadvantage the appellants. The Tribunal referenced a Supreme Court ruling stating that once an application for extension is made, it is the duty of the officer to grant or reject it. Therefore, the Tribunal concluded that the lack of a response from the Collector did not invalidate the appellants' claim for exemption.

3. Whether the appellants switched from condition (a) to condition (b) of the Notification:
The Assistant Collector had found that the appellants intended to switch from condition (a) to condition (b) due to technical difficulties, but they did not actually change the method of manufacture. The Tribunal decided that this issue required further investigation and remanded the matter to the Assistant Collector to verify whether the appellants had indeed varied the method of manufacture. The Tribunal emphasized that the onus to prove this would be on the appellants.

Separate Judgment by Member (J):
Member (J) G.P. Agarwal highlighted the difference in the wording of two relevant Notifications, No. 259/83-C.E. and No. 99/84-C.E. The latter required an undertaking to be furnished, which the appellants had not done. Therefore, the benefit of Notification No. 99/84-C.E. was rightly denied. However, for Notification No. 259/83-C.E., the declaration in the classification list was deemed sufficient notice. Member (J) also agreed to remand the issue of whether the appellants switched from condition (a) to condition (b) to the Assistant Collector for fresh consideration.

Conclusion:
The Tribunal concluded that the appellants had substantially complied with the conditions of Notification No. 259/83-C.E. and that procedural delays should not deny them the exemption. The matter was remanded to the Assistant Collector to verify the method of manufacture and to decide the issue afresh. The Tribunal also upheld the denial of exemption under Notification No. 99/84-C.E. due to the lack of an undertaking.

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